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3 EFFICIENCY, COORDINATION, AND THE MARKET ECONOMY

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In this chapter we complete our broad preliminary survey of the theory of the market system, its operation and achievements. Chapter 2 attempted to provide a bird’s-eye view of the way the market transmits economic forces through the system, tending to make the actions of all market participants dovetail more closely in the system. The present chapter demonstrates how these interactions in the market economy enable it to fulfill the basic functions of any system of organization. We are not concerned here with what the market process is or with the patterns of relationships the process consists of, but with how it accomplishes what it is supposed to accomplish. Some remarks are necessary to make clear, at the very outset, the point of view from which such an appraisal can be undertaken.

Market Theory and the Price System

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